On Wednesday at 2 PM, the U.S. Federal Reserve will release its economic projections for the next two years, including its inflation forecast for the next two years, as well as individual projections from members of the Federal Open Market Committee. The FOMC will also release a statement explaining its latest decision concerning interest rates and other decisions concerning monetary policy. At 2:30 PM, Federal Reserve Chair Ben Bernanke will hold a press conference explaining the latest action (or inaction) from the Fed.

As usual, the investing world will be watching today and hanging on every word in the FOMC's statement and in Bernanke's press conference. The Fed is expected to leave rates unchanged, and continue its bond purchasing program to the tune of $85 billion per month through the third quarter of 2013.

Previously, Bernanke has said that as long as the unemployment rate remains above 6.5%, it would continue its ultra-loose monetary policy. The February unemployment rate was 7.7%.

Stocks have been on a tear, with the Dow recording an all time high two weeks ago upon exceeding 14,400. This is due in large part to multiple rounds of quantitative easing, the first of which was announced by the Fed in late 2008 in response to the housing collapse and subsequent market crash brought on by the insolvency and bailing out of several major financial institutions. Over the last three and a half years, the Fed, with its zero interest rate policy (ZIRP), has sought to discourage investors from taking refuge in the U.S. dollar and treasury bonds — typically seen as safe-haven assets — in an attempt to spur lending.

The Fed's policies have prompted investors to seek yields elsewhere, particularly stocks, commodities, and precious metals. On Wednesday morning, stocks were in positive territory. The Dow, S&P, and NASDAQ were all up about 0.5% at 10:10 AM on Wednesday.

The Fed's announcement is not expected to send the markets spasming in any particular direction, as it has made clear the conditions under which it would reverse course on its monetary policy. For all intents and purposes, the Fed's bond-buying program and ZIRP have been priced into the market. Any hint of a deviation from this plan, however, could shake things. This is not expected.

There is also concern that stocks have been too hot, and are due for a pullback, lest equities become too hot too fast. Regardless of the Fed's announcement, expect the smart money to start flowing out of stocks soon.